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S&P Global Hits New 52-Week High on Strong Growth Drivers
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Shares of business services provider S&P Global Inc. (SPGI - Free Report) hit a new 52-week high of $193.50 on Jun 7, before closing the trading session considerably lower at $146.01, for a healthy year-to-date return of 35.8%.
S&P Global’s share price has been on a steady uptrend since Jan 1. In the last one month, the stock has been on a significant uptrend. Owing to its strong price appreciation, this stock carries a Zacks Rank #2 (Buy). The stock currently has a long-term earnings growth expectation of 12.33%.
Growth Drivers
S&P Global is focusing on its core business, which is helping it emerge as a leader among rating providers, benchmark providers and analytics in the global capital as well as commodity markets. It completed several business divestitures in third-quarter 2016 including the sale of J.D. Power, its two pricing businesses SPSE and CMA, and the equity research business. The impact of these divestitures was seen in its first-quarter results as well.
The company completed the acquisition of SNL Financial for $2.2 billion. It is a strategic fit for S&P Global as its business is in sync with the S&P Capital IQ and Platts businesses, which will help the company avail cost cuts and revenue synergies. Moreover, it will enable global expansion on a greater scale especially within the banking and insurance sectors as media and real estate areas emerge as new opportunities. The acquisition will generate synergies of $70 million of EBITDA (earnings before interest, tax, depreciation and amortization) by 2019 and a tax benefit (net present value) of $550 million. It will also be accretive to adjusted earnings per share in 2017 and earnings on a GAAP basis in 2018.
SNL Financial delivered consistent mid-teens revenue growth for the last 10 years. Also, the company’s subscription-based revenue model with high renewal rates and strong future revenue visibility bodes well for S&P Global.
The company has outperformed the Business Information Services industry over the past three months with an average return of 11.4% compared with a gain of 4% for the latter. S&P Global has been consistently impressing investors with its earnings performance over the last 16 quarters. It reported better-than-expected earnings in the first quarter as well, posting an earnings beat of 15.7%.
On May 9, the company inked a strategic data agreement with business news provider, Thomson Reuters Corporation (TRI - Free Report) to expand its product portfolio. The collaboration is likely to benefit customers of both the companies. According to the terms of the agreement, S&P Global Market Intelligence (a division of S&P Global) will provide transcript coverage of public as well as private companies to Thomson Reuters’ users for enhanced data analysis. This includes complete coverage of firms in the S&P 500 and other leading stock market indices.
CoStar Group has a healthy long-term earnings growth expectation of 17.5%. It reported a trailing four quarter average positive earnings surprise of 11.3%.
EPAM Systems has a solid long-term earnings growth expectation of 20%. It delivered a trailing four quarter average positive earnings surprise of 3.2%.
3 Top Picks to Ride the Hottest Tech Trend
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Last year, it was generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for those who make the right trades early. Download Report with 3 Top Tech Stocks >>
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S&P Global Hits New 52-Week High on Strong Growth Drivers
Shares of business services provider S&P Global Inc. (SPGI - Free Report) hit a new 52-week high of $193.50 on Jun 7, before closing the trading session considerably lower at $146.01, for a healthy year-to-date return of 35.8%.
S&P Global’s share price has been on a steady uptrend since Jan 1. In the last one month, the stock has been on a significant uptrend. Owing to its strong price appreciation, this stock carries a Zacks Rank #2 (Buy). The stock currently has a long-term earnings growth expectation of 12.33%.
Growth Drivers
S&P Global is focusing on its core business, which is helping it emerge as a leader among rating providers, benchmark providers and analytics in the global capital as well as commodity markets. It completed several business divestitures in third-quarter 2016 including the sale of J.D. Power, its two pricing businesses SPSE and CMA, and the equity research business. The impact of these divestitures was seen in its first-quarter results as well.
The company completed the acquisition of SNL Financial for $2.2 billion. It is a strategic fit for S&P Global as its business is in sync with the S&P Capital IQ and Platts businesses, which will help the company avail cost cuts and revenue synergies. Moreover, it will enable global expansion on a greater scale especially within the banking and insurance sectors as media and real estate areas emerge as new opportunities. The acquisition will generate synergies of $70 million of EBITDA (earnings before interest, tax, depreciation and amortization) by 2019 and a tax benefit (net present value) of $550 million. It will also be accretive to adjusted earnings per share in 2017 and earnings on a GAAP basis in 2018.
SNL Financial delivered consistent mid-teens revenue growth for the last 10 years. Also, the company’s subscription-based revenue model with high renewal rates and strong future revenue visibility bodes well for S&P Global.
The company has outperformed the Business Information Services industry over the past three months with an average return of 11.4% compared with a gain of 4% for the latter. S&P Global has been consistently impressing investors with its earnings performance over the last 16 quarters. It reported better-than-expected earnings in the first quarter as well, posting an earnings beat of 15.7%.
On May 9, the company inked a strategic data agreement with business news provider, Thomson Reuters Corporation (TRI - Free Report) to expand its product portfolio. The collaboration is likely to benefit customers of both the companies. According to the terms of the agreement, S&P Global Market Intelligence (a division of S&P Global) will provide transcript coverage of public as well as private companies to Thomson Reuters’ users for enhanced data analysis. This includes complete coverage of firms in the S&P 500 and other leading stock market indices.
Other Stocks to Consider
A couple stocks in the industry worth considering include CoStar Group, Inc. (CSGP - Free Report) and EPAM Systems, Inc. (EPAM - Free Report) , both carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CoStar Group has a healthy long-term earnings growth expectation of 17.5%. It reported a trailing four quarter average positive earnings surprise of 11.3%.
EPAM Systems has a solid long-term earnings growth expectation of 20%. It delivered a trailing four quarter average positive earnings surprise of 3.2%.
3 Top Picks to Ride the Hottest Tech Trend
Zacks just released a Special Report to guide you through a space that has already begun to transform our entire economy...
Last year, it was generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for those who make the right trades early. Download Report with 3 Top Tech Stocks >>